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Canacol Energy’s 5.75% dollar bond due 2028 plummeted over 15 points to 50.9 cents on the dollar after the company decided to discontinue its quarterly dividend to improve balance sheet flexibility. The Columbian company added that there would be no significant share buybacks in 2024 due to a focus on reducing debt. This came despite its record EBITDA of $237mn achieved in 2023 in addition to a 11% RoCE. Canacol Energy expects a $250-290mn EBITDA in 2024 and is awaiting approval for a fourth contract in Bolivia.
The natural gas E&P company’s net debt-to-EBITDA was at 2.85x on a TTM basis as of end-December 2023. This was up from the 2.7x seen in mid-2023 and the 2.6x at in end-September. Canacol’s Director of Finanace said that their “bond leverage covenant is at 3.25x in current space and the revolver is at 3.5x maintenance. As such, we’re still well within those covenant restrictions”. The company had cash balances of $39mn at end-December.
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